MUNJALAU.NS WACC - Weighted Average Cost of Capital

The WACC of Munjal Auto Industries Ltd (MUNJALAU.NS) is 15.3%.

The Cost of Equity of Munjal Auto Industries Ltd (MUNJALAU.NS) is 19.15%.

The Cost of Debt of Munjal Auto Industries Ltd (MUNJALAU.NS) is 9.50%.

	Range	Selected
Cost of equity	17.60% - 20.70%	19.15%
Tax rate	27.00% - 31.50%	29.25%
Cost of debt	8.10% - 10.90%	9.50%
WACC	14.0% - 16.6%	15.3%

WACC

MUNJALAU.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.3	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.60%	20.70%

Tax rate	27.00%	31.50%
Debt/Equity ratio	0.44	0.44
Cost of debt	8.10%	10.90%

After-tax WACC	14.0%	16.6%


Selected WACC	15.3%

MUNJALAU.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for MUNJALAU.NS:

cost_of_equity (19.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.3) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.